Exact Sciences acquiring two companies for $2.56 billion

Selling $869 million in stock

Madison-based Exact Sciences reprogrammed its equipment that ordinarily looks for DNA associated with colorectal cancer to instead look for novel coronavirus.
Madison-based Exact Sciences reprogrammed its equipment that ordinarily looks for DNA associated with colorectal cancer to instead look for novel coronavirus.

Last updated on October 27th, 2020 at 01:40 pm

Madison-based Exact Sciences Corp. announced Tuesday it is acquiring two health care companies for $2.56 billion.

Exact Sciences, the maker of at-home colon cancer screening test Cologuard, said it will buy Cambridge, Massachusetts-based Thrive Earlier Detection Corp. for $2.15 billion in cash and stock. The deal was approved by both companies’ boards of directors and is expected to close in the first quarter of 2021.

In a separate transaction, Exact Sciences has acquired Cambridge, England-based epigenetics company Base Genomics for $410 million in cash, according to SEC filings.

Thrive is developing a cancer screening test, called CancerSEEK, that is designed to detect early-stage cancer before symptoms occur. The goal is to integrate the test into patients’ routine medical care.

In its announcement, Exact Sciences said the combination the company’s scientific platform, clinical organization and commercial infrastructure, combined with Thrive’s CancerSEEK, will make it a leading competitor in blood-based multi-cancer screening.

Exact Sciences has previously invested in two Thrive funding rounds.

Thrive has conducted a 10,000-patient, prospective, interventional study in a clinical setting with an earlier version of CancerSEEK, which saw promising results detecting 10 types of cancer, according to the company’s announcement.

Exact Sciences and Thrive have established clinical partnerships with Mayo Clinic and Johns Hopkins University.

“The acquisition of Thrive is a giant leap toward ensuring blood-based, multi-cancer screening becomes a reality and eventually, the standard of care. We couldn’t be more excited that Exact Sciences will be at the forefront of this incredible opportunity to serve patients,” said Kevin Conroy, chairman and chief executive officer of Exact Sciences.

“We have long respected the Thrive team for their rigorous scientific approach, having participated in both funding rounds as an investor,” Conroy added. “We are proud to take our partnership to the next level by leveraging Exact Sciences’ established R&D team and highly accurate testing platform to augment development of CancerSEEK and accelerate its commercialization. By combining the expertise of both organizations, we believe we can bring this powerful technology to patients faster.”

David Daly, CEO of Thrive, said working with Exact Sciences will allow for quicker and more widespread adoption of its test.

“Thrive is driven by the knowledge that if cancer is caught early enough, it can be more effectively treated or even cured, and every patient deserves a chance for a better outcome,” Daly said. “Our team has made significant progress toward our mission and we are eager to collaborate with and benefit from Exact Sciences’ expertise, and believe that together we will enable broader, quicker adoption of our test. With the support of our ongoing partnership with Johns Hopkins University, we are energized to contribute meaningfully to our shared mission of advancing the fight against cancer and providing life-changing answers to patients in need.”

Exact Sciences also aims to increase its cancer screening capabilities with its acquisition of Base Genomics. The company is focused on DNA methylation analysis, a promising approach to detecting cancer at its earliest stages.

Exact Sciences said Base’s technology is “highly complementary” to its own existing methylation expertise and multi-marker approach.

Exact Sciences also announced Tuesday it is selling $869 million in stock to 10 institutional investors, including some of its largest shareholders as well as health care specialist firms Casdin Capital and Rock Springs Capital. The offering is expected to close Oct. 29.

Some of the proceeds will be used for the acquisition of Thrive, along with repayment of debt and working capital.

Exact Sciences also released its third-quarter results Tuesday, reporting a net loss of $219.9 million, or $1.46 per share. That’s compared to a net loss of $40.5 million, or 31 cents per share, in Q3 of 2019.

It reported revenue of $408.4 million for the quarter, up year-of-year from $218.8 million in Q3 of 2019. That increase was driven largely by revenue from COVID-19 testing, which amounted to $102.2 million.

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